Heating oil prices 'likely to remain high'

25 January 2008

Heating oil users should not expect their bills to fall substantially before the end of the winter, according to a US government department.

Crude oil prices, one of the major factors determining the cost of home heating oil, have plummeted in recent weeks because of concerns about the US economy.

The latest weekly update from the Energy Information Administration (EIA) revealed that the average cost of residential heating oil in the US last week was $3.33 (£1.68) a gallon, down 3.1 cents from last week but up 97.9 cents from 12 months ago.

However, the EIA's report warned that although crude oil prices have fallen in recent days there is little chance of the downward correction taking them as far as the levels of January 2007.

"As a result, consumers should expect heating oil prices to remain higher than previous years for the balance of the heating season," it concluded.

Figures compiled by BoilerJuice show that although the average cost of heating oil in the UK has fallen by a little under five per cent in the past month, it is still almost 50 per cent higher than it was 12 months ago.